AuditPCH: Auditable Payment Channel Hub With Privacy Protection

Anonymous Payment Channel Hub (PCH), one of the most promising layer-two solutions, settles the scalability issue in blockchain while guaranteeing the unlinkability of transacting parties. However, such developments bring conflicting requirements, i.e., hiding the sender-to-receiver relationships from any third party but opening the relationship to the auditor. Existing works do not support these requirements simultaneously since off-chain transactions are not recorded in the blockchain. Further, the privacy protection strategies hinder auditors from capturing the payment relationships. Thus, it is still a challenge to audit the finance activities of PCH transacting parties. This paper proposes a novel anonymous PCH solution called AuditPCH to achieve privacy and auditability. Concretely, we design a Linkable Randomizable Puzzle scheme for constructing conditional transactions, allowing a sender to pay for a receiver via the hub. As such, AuditPCH, with the new LRP scheme, ensures that 1) payment relationships can be protected from the hub and 2) an auditor with necessary trapdoors can associate the sender and receiver of a payment. We prove the security of AuditPCH under the Global Universal Composability framework. The extensive experimental evaluations on AuditPCH are established to demonstrate its functionality and flexibility.